on. we don't have the big circle panel on its february 6th 2016, squawk box begins right now. >> live from the most powerful city in the world, new york, this is squawk box. >> oh we're on tv. good morning everybody and welcome to squawk box here on cnbc. i'm becky quick with joe kernen. andrew is on assignment today. the january unemployment report is minutes away now. they added 237,000 jobs last month. the unemployment rate is seen falling to 5.5%. we're already at the lowest level in six years of 5.6%. they see it dropping another another .1%.

you have average hourly earnings rise by .3%. this could be the 12th straight month of job gains above 200,000 which would be the longest such streak since 1994 and that has people saying the fed is behind the curve and other people say when you look around the world to see what's happening with the strong dollar he they would be crazy to be raising rates but it's a source of continued debate the do you is up more than 4% over the last four days nasdaq is up for the year. the index is on track for the best week since december of 2011 and right now the futures ahead of the report are basically unchanged waiting to see what happens with this s&p futures off by over a point and nasdaq down by two. >> people are now saying can you take the january effect and move it to february and is that what happens for the year? >> sometimes it gets the end of

the year. none of these things work all the time. gave up on the super bowl. >> afc is bad. >> here are the other big stories we're watching today. german chancellor angela merkel and the french president are in moscow and they're meeting with vladimir putin to discuss how to stop the violence in eastern ukraine oil prices are also going to be a big focus on the markets at 1:00 eastern. we'll get the weekly rig count. it's a measure of how many drilling riggs are actively exploring right now -- exploring for or in the development of either oil or natural gas in north america. a number of states meanwhile in a totally different story are probing the big anthem data breach. investigators are looking for possible ties to china but the data wasn't encrypted. that's my offering to you. >> it has to be something that we are looking at much more

closely. >> why wasn't it encrypted? >> you have to realize if you are going to be the keeper of such sensitive data that it's your responsibility as a company to step it up. they con acted them immediately. if you're going to hold on to my information, credit card not my responsibility. approximate you're going to hold on to my social security number and tie that together with my employer and history in terms of my health and family's health you have a higher threshold and you should be looked at the same way the banks are in terms of safety. >> what can the hackers use? what can they get? >> there's already hackers offering to buy. they haven't seen this on the open market yet but last night on nightly they had someone showing how there are people who are offering to buy this information immediately. >> and then do stuff with it. >> right you can steal their

entire identity. >> we should tell you about a number of stocks on the move this morning. user growth slowed in the fourth quarter but the ceo says it is picking up in the current quarter. we'll have more on twitter in a moment go pro results beating it as well. the shares are dropping. the company announcing the chief operating officer is re-signing and yelp shares getting slammed. the consumer review website signing up viewer subscribers and business customers. they're worried about slowing growth in the united states. >> among other stock to watch today we're still if sort of earnings season and we have pandora shares down sharply this morning. shares at the online music streaming service falling short hit by weaker than expected advertising revenue. let me check something because single letter stock symbols. >> i saw it too. it was a whole category. >> you have no life. >> i was so bad.

they all guessed wrong. >> they got verizon. >> viacom and -- >> they did get pandora. >> i thought that was stunning that you could get pandora and not get visa. >> my kids p used to be phillip, petroleum and z which is now zillow used to be woolworth. >> s used to be sears. it's now sprint. >> it's so funny when i saw single letter stock symbols as a category i made everybody watch the show for the rest of it. you're right. we have no shows. >> we have no lives but we all watch it together. it's a little bit sad. did you see how hard that stuff was? >> yes. >> do you know the woman that got most of the answers on it was actually a drama coach. >> all right. because the teefers. >> teachers week. >> it is and the questions are

easier. they don't want the teachers to look bad. >> but none of them got the math teachers right. >> x equals 2. >> we have no lives. >> we saw the whole thing. let me talk about -- >> we get up early. >> yeah that's our night. watching alex it has trebec impress himself with how he pronounces french names activism blizzard -- the thing that bug mess about alex is when they don't get it right he's like no. he has no idea. he couldn't get -- he couldn't get any of them but he's like no. it's blah blah. yeah right. activision blizzard. blaming the impact of a stronger dollar. they earn about half of their revenue from outside of the u.s.

we'll talk to the ceo of buffalo wild wings. revenue better than expected. comp sales was good. stocks near a high. we'll talk about it. talk about it costs more for wings. prices have gone up for wings and labor is more expensive and they're reaching the saturation point of like 1,000 restaurants and they have to do something else and i have an idea. they got some stuff. >> you need a new theme? does it have anything to do with mexican food? >> am i that predictable. here's my idea rusty taco they got out of a relationship. if you're watching sports what do you want? wings and what else? >> tacos. >> yeah. but nachos. >> i think you can get already nachos at buffalo wild wings. >> oh. >> make them better then. >> tacos.

>> as we showed you the futures are waiting to see what happens with the jobs report. if you take a look right now we'll see s&p futures down by 1 point. the dow was up another 211 points. s&p up another 21 points. nasdaq up 48. all three turning positive for the year. the dow saw it's third biggest gain of the week. third big gain of the week now up more than 4% for the week. on pace for the best week since december of 2011. let's look at what's been happening with europe. with all the questions about greece it's been an up and down week. the cac is down by .5% and dax down by .75%. things settled down a little bit in asia overnight take a look and yul see the shanghai was down by about 2%.

the nikkei was down by .8% oil prices continued wednesday's steep losses. you saw it up about 4% to just over $50 yesterday. this morning it's up another 3% or better to 5214 to wti. if you have been watching what's been happening in the currency markets the dollar this morning -- we'll check out the 10 year note first. yielding 1.817%. off the low yields from earlier in the week. if you want a look at what's happening in the currency market the dollar is up against the euro at 114. dollar is down against the yen at 117. if you have been watching the gold market this week you'll see right now gold prices are up just slightly. $1,265 an ounce. >> okay we're going to talk about twitter they have chicken

quesadilla. >> that's good. i still think they can expand into other taco-type. >> i knew you were going to go with mexican food. >> i love mexican food. i'm thinking about it right now. as becky mentioned twitter posting a big beat on the top and bottom line but slowing user growth is still a key concern as you can see right there but they have a lot of excuses for what happened and i tried to understand. twitter added 4 million monthly net users. and the ceo has been dealing with criticism of his leadership in an interview last night with carl, carl asked him for his reaction to those that want to see him gone. >> if you're going to be the ceo of a public company you better develop a thick skin. that's the world we live in.

i'm focused on two things one, making sure that the leadership team here, the people working for me and the next level of leadership under them are working well together and pushing the company forward and improving our pace and quality of execution and then secondly making sure that i'm taking the time to look out ahead over the next hill and around the next corner. >> and here to break down the numbers is dan from hudson square research and steven who is editor and chief of back channel at medium.com so i read it and there's a weird ios 7, ios 8 upgrade that had people losing their twitter accounts and they have to redo them or something and it's hard to be a new twitter user if you don't know who you want so there's a way where you can get like 100

people to follow based on what your stated interest is. maybe that will help. did both of those things explain why it dropped? >> it's never a good thing when a company is having issue with user growth to blame the most successful tech company in silicon valley. >> they blamed apple and apple said there was no glitch. it was the way they incorporated it into twitter. >> they actually said it was relative to your password so the people that lost their password through the transition never found their way back. >> they weren't users. >> they weren't really committed users to begin with but revenues are up 100% year over year but user growth only 20% so when you're trading at 100 times earnings i want the reclining seats and the champagne. they're going to hit this and such a very expensive stock for the user growth. people say it's not just about user growth because we have

syndication beyond where we are. it's a good business. there's nothing wrong with twitter but at that valuation and the valuation right after their ipo it assumes it can be as big as facebook. they're not going to be they grew users 57 million quarter on quarter. so even if we add back the ios 4 we have 8. it's still only 8 million users and book at this size was growing 50 to 60 million users quarter on quarter and they're still growing 40 million. >> and five times as many right now. >> it's a great business and well run. steven had the call before earnings with a great article on how their engine was turning on. they need user growth. advertisers want targeting, yes

but first thing they ask is where's the reach? who is going to see the add i placed on your network? >> i also read they're close with google now so you can find tweets. wouldn't that answer some of the issues? >> they had that a few years ago. they have this thing called the fire hose that you -- >> because there's so much coming out. there's billions of tweets right? >> there's a huge amount of traffic from the 300 users. they tweet a lot and they wanted to do real time search and got all the data from twitter right away and then they cut it off. they felt that google was more of a rival and they put it into this other company which they eventually bought but now they're reopening a fire hose because they have a new strategy now they decided to do a slight of hand and redefine everyone that sees a tweet as a twitter

user so you're a twitter user even if you're not on twitter is the way they're saying it now and the syndication they're moving tweets to flipboard and yahoo! japan will be many more places. google will be one of them so they're going to say we're going to sell to people that aren't twitter users and they even bought a mobile advertising platform to help grease that. >> so half a billion in sales, right? >> no. >> how much in revenue? >> about 1.4 last year. >> for the quarter? >> yeah. >> so it's going up quickly obviously but if i just do 2 billion as a run rate at 26 billion it's at 13 times sales, right? >> right. >> 100 times earnings. >> why did we even give them earnings? is it profitable --

>> on a cash basis it's profitable. they have 160, 170 million in stock options expense. >> if you back it out -- >> sure but for better for worse, a lot of new economy and internet companies, if you add the stock options back in they're losing money. we like to look at the cash basis basis. >> it's a huge improvement over where they had been but when twitter started as a public company they're around 10% so they have improved it's a well run business and that speaks to this notion of having him leave. he thinks he's doing a great job because nothing is really wrong with twitter. what's wrong with twitter is the expectations they can be a lot bigger.

>> i'm looking at earns per share expected over the next several years. 36 cents do you expect the growth in earnings is something they can achieve? >> there is somewhere close to 0 efficacy of a two year earnings target. >> with a company like this? >> a company like this. if we can be somewhere within the ballpark within the next quarter that's pretty phenomenal which is why i think the strategy and where we see the product going where we see user engagement going, actually no longer report engagement metrics which is usually a bad thing for a company like this. >> right. >> i figured out how to follow a trending story and it's just

useless stuff. everybody has an opinion and i don't care about any of what they have to say. >> i'm a heavy user of it. if there's a conversation on twitter it's exceptionally hard to read and the founders of twitter started medium a little more bandwidth to read and have a conversation about important topics where twitter is so hyper aprooef yated it's so hard to understand once you get there a lot of people love it and depend on it but it's so hard when you first get on there that's why they're giving you a prefab list of people to jump in there. >> people are as obnoxious as they want because they're anonymous. >> they actual lay poll apologized to all of twitter for saying he's done a lousy job at filtering that stuff out. >> i never met a twitter user i

did like. i never met a man i didn't like. >> like us? >> i don't know. just thick with haters so you think real quickly that it grows in -- how many years before it grows into a $26 billion company? >> a lot of thing versus to happen. they have to crack a plan the good thing is its sort of a flip around. when twitter went public they said the users are going to grow. how are you going to make money from this thing? the revenue sides killed it. they're saying you're making money but your user growth is terrible. that story is awful interestingly the people in charge of building the rev news sides from the product end are now in charge of all the products at twitter so they think they extend their success in building the ad system into building the main product. >> you're not convinced that's the right move? >> no they're smart people they

have given four or five people a start over the last few years. >> it's been really high. that's been another complaint. it is improving but i have to define that by all the metrics improving. so i want a clean beat. i want the reclining seats and champagne. >> tweet some of this stuff out. >> we should mention we're both on twitter. >> yeah. >> as far as we know. >> no we're actually looking at it as we're going through. >> i'm looking at it. guys. thanks. appreciate it. >> it's just the internet. >> yeah. >> but are people really like this? >> only when you're anonymous. >> when we come back this morning why iphone lovers in china are skipping the apple store. excuse me.

eunice takes us inside the black market right after this. first here's a look back at this date in history. ♪

i love my shows, but i can't just sit around all day. that's why i have xfinity. their cloud based dvr lets me take everything i recorded, anywhere i go. which is perfect for me, [whispering] because i have responsibilities. ...i mean that's really interesting, then how do you explain these photos?! [people gasping] objection your honor. sustained. with the x1 dvr library you could take anywhere,

xfinity is perfect for people on the go. it receives the highest marks in serving, dining and location by readers. >> welcome back everybody. you may have noticed that joe and i are wearing red today. there's a reason for that. today is national wear red day across the country. the american heart association is trying to raise awareness of women's heart disease. women are more likely than men to get heart disease and stroke. but there's good news in this. increased awareness and life style changes can help prevent 80% of cardiac events. >> not everybody realizes that because i don't know for

whatever reason or not even worse. >> the symptoms can be different for women in how a heart attack manifests it's too. it's all about awareness and knowing what to expect. >> people ask us to wear something we'll wear it. i need suggestions anyway. in other health use we're following the measles out break. five babies in a chicago suburb have now been diagnosed all at the same daycare center. the news about the babies raises the issue of infants are too young to get the vaccinations. 4 million kids in the u.s. aren't old enough to receive the protection and if exposed 9 in 10 of the babies will get sick. it's highly contagious. >> there's a potential expected case in new jersey as well which would add that to the number of states. >> how many are there now? >> i want to to say 17. i could be wrong. >> 17. >> but it is widespread at this point. well let's switch gears right

now to technology. when you want to buy an iphone in china you can head to the apple store but that's not the only way to get your hands on one. more on the business of smuggling iphones into beijing. >> along the border with hong kong, iphones are smuggled into mainland china in suitcases, boxes and bags by people paid as little as $42. iphone mules walk right through customs. each were carrying the phones in parts. a bag of chargers for one and earphones on another to avoid getting caught by the authorities. the goods are handed off in a dark alley where others reassemble and package the phones for sales. china is the biggest market outside of the united states. you can buy them in the official stores and you can come to a place like this, a major electronics market. >> outside iphones are sold at authorized resellers but inside

there's a healthy market trade. some are new. many refurbished. which are which can be hard to tell. most of the new phones are smuggled from hong kong though some u.s. models can be found. new ones here cost $150 less than at the official store where the most popular model, the 64 gig iphone 6 runs $1,000. quite bargain for the phone that sets the average migrant worker back two to three months pay. >> shares of apple up about 8% but this idea of a grey market or black market is a huge concern to any of the companies doing business in china. when we come back this morning, a very disturbing story about where germs live in new york city. here's a hint everywhere. first before we get to that and as we head to a break let's look at yesterday's s&p 500 winners and losers. >> that was wonderful. bravo. i love that. it was pretty good.

it wasn't bad. >> could have been a lot better. >> i didn't like it. >> it was terrible. >> it was bad. >> it was awful. >> boo.

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welcome back everybody. we're telling you about a few things that caught our attention this morning. all i can say is another day, another disgusting story that has me squeamish this morning. this is on the front page of the wall street journal. it talks about scientists tracking the subway to try to find out what you can find when it comes to germs and bacteria found in new york city.

you know what they say, new york city has everything. they were not kidding and exaggerating in this situation. they found germs that can cause the plague uptown meningitis downtown and antibiotic resis resistant infections throughout the burrows. they found them in 220 stations. food positioning in 215 stations. urinary tract infections in 192. they found staph, men united states sepsis. they want to make sure that they track what's there. you can find out if anything is spreading or out of whack. >> i want to know if you go anywhere? airports in any city and i bet you get basically a pretty similar spectrum. >> when kyle was a baby and i was traveling with him i would

freak out and wipe down the whole seat and everything. i'm not doing that anymore and i realize i'm kind of getting out of my complete phobia phase but he's also where he's had most of his shots. >> the story i don't think i told you is when you work in a molecular biology lab you use a lot of bacteria and e.coli. you just let it go for three days. now if they didn't run out of space and food they would cover the entire world. in three days. but what i'm telling you is when it gets fully concentrated with bacteria, then you put it in a center fuge and the bottom is bacteria. >> what does it look like and smell like. >> that's what i wasn't going to tell you. it smells like bad breath on

steroids. the entire lab -- it's the grossest -- but you've never really seen bacteria it's a bag disgusting mess. >> did you ever throw it at anybody? >> no but it's everywhere. it's around. once it's there you have to work under a hood it's everywhere. >> okay. >> i don't know what that's doing around here. >> i just think it's pretty much, you better you know you live with -- it's easier to live with them then against them. >> i'm glad they're doing this so you know if something is unusual. >> i would say it's probably everywhere. even though the subway seems worse because people are relieving themselves where ever. >> remember joe flint who used to work with us for awhile he tweeted something -- >> relieved himself in the

subway? >> no i tweeted something about this last night and he wrote back yes in september he stepped off of the train on to the subway platform and right into a big pile of doo doo. on the subway platform. >> human? >> that was the implication. >> that's hideous. the botox piece i want to talk about i don't know a lot about this. men are using botox much more than before. up 310%. but the doctors point out the men aren't asking for the same thing that women ask for. they don't want no wrinkles at all on the forehead. they want something called the wall street battle scar on their forehead to still be there. so i don't know what they're looking for then. i don't know where they're getting it or what it would be used for. >> maybe it's a lighter dose. >> maybe you don't want things quite as bad. but it's weird. >> it's needles.

>> that's the thing i have to get past is needles in my forehead. an elective procedures where you get needles in your forehead. i want something to be really -- you have to have this if i'm going to cut you. >> you're still going to think about it because it's going to have to get really bad. >> but i'm getting to a point where i say 60s -- i'm not 60s but i say 60 is the new 40 but 60 things sag. certain parts. >> look i believe in aging gracefully. i think we're both going to do that and i'm proud of the experience. >> it's late for me to age gracefully but thank god have the hair right? >> you look good. >> i paid top dollar for. anyway. >> well tun. money well spent. >> when we come back this morning it is a busy jobs friday that we still have ahead coming up on squawk box. up next hacking america. why the major data breach at

anthem could be the worst attack yet at a company and then jobs in america. which businesses are hiring. also at the top of the next hour a political show down. they'll be joining us on set to debate the biggest issues of the day. stick around, squawk box will be right back. ♪

i love my shows, but i can't just sit around all day. that's why i have xfinity. their cloud based dvr lets me take everything i recorded, anywhere i go. which is perfect for me, [whispering] because i have responsibilities. ...i mean that's really interesting, then how do you explain these photos?! [people gasping] objection your honor. sustained. with the x1 dvr library you could take anywhere,

xfinity is perfect for people on the go. the sec is reportedly probing blackberry trading ahead of a report about the company and samsung. they're said to be looking at a spike in options on january 14th. they report in flows into

corporate bonds. the firm said that last week saw the second highest amount since it began tracking the data in 1992. radioshack filed for bankruptcy protection. it has a deal to sell 2400 stores to an affiliate of its largest shareholder. sprint with operate 750 of the stores after the deal. >> stocks to watch include a multibillion dollar take over deal in the news this morning. harris corp. is buying exelis for 2375 in cash and stock. exelis closed yesterday at 17.71. it valued at $4.75 billion. >> the nation's second largest health insurer hacked with medical information and personal data of more than 80 million people compromised. our next guest says this could be the tip of the iceberg and he fears a host of other industries are at risk. he is the cofounder and

executive chairman of lookout. thank you for joining us this morning. we appreciate having you here. >> when i hear about this i feel like this is a different story. it seems like every week we're hearing about more attacks of retailers or websites that have been compromised but to me it seems like a different story because of the nature of the information that was stolen. what do you think? >> that's correct. this one is different in a couple of ways. one it may end up being the worst breach of its kind in term of the scale and scope that exists and also beyond just credit cards being compromised this was very broad in terms of the amount of personally identifiable information. that's very difficult to recover from. it's easy to set credit monitoring or cancel your credit card number but things like a social security number is much more difficult to deal with. >> we hear some of this information wasn't encrypted and

that's kind of stunning. i just wonder what you think about how corporate america is in terms of being ready for challenges like this? >> well i think as we look at the ever increasing proliferation of technology and our society this needs to become a board level issue and at many organizations and many enterprises today it's not. we need to see a fundamental shift in terms of the seriousness of the conversation of cyber security. that needs to be a topic all the way up to the board level. >> john you are somebody that's done a lot of this. as a hacker playing around with things seeing what you can find out now trying to help companies protect themselves but you're out there. how bad is the situation right now? how safe is our information as consumers? >> well i was contemplating this and there's many people working hard to make the world a safer place no doubt. that's something we're doing every day but one of the theories that i have is for any given unit of time that goes by the probability of an organization being compromised

is trending to 100%. >> wait a second any corporation being compromised there's almost no way to protect their information. >> that's the current situation of the world and we're working to change that. >> what do you do to protect yourself? do you have certain tricks that you have? do you not have credit cards? how do you handle it yourself? >> i think at the end of the day we need to focus on kind of building productive technologies and moving forward of course but the current state of security is very reactive. >> what do you personally do? >> a host of different technologies that i employ to protect my personal information but i think the key is it should be something that's very simple for the average user. you shouldn't need to be a cyber security expert to protect yourself and beyond me protecting myself personally the challenge is how does one defend their own information when it's at arms length beyond something that's outside the control of themselves. >> you can't get health insurance without giving this information to a company. how do you trust that it is then

safe. >> i'm at risk as much as any other person because i have health insurance just like anyone else. that's the challenge. i can take huge steps to secure my mobile device my pc or critical infrastructures but my health information is as at risk as anyone else's and we're trying to help influence the state of cyber security at an enterprising government level for example. >> i would say that the government has suddenly realized over the last maybe two to three years that this is a big issue. we hear it talked about and being funded in different ways. how much progress have we made? >> we're definitely making progress but the progress is being driven by breaches and very reactive as i said. we need to move to a world where security is not reactive but proactive and predictive. in the case of the sony hack there's indications of compromise as far as six months in advance inside of the insfra

infrastructure. there's data that exists that allows us to shift security from being reactive to predictive and predict threats before they happen. >> when you say you think that over a period of time there's 100% probability that any organization or company could get hacked that leads me to the banks first of all. is there a chance you could wake up in the morning and the money you thought you had in a bank or ira is just gone? >> it's possible but banks are very focused on cyber security and defending against the threats and have cob trolls and protections in place. most consumers are not liable for issues when it comes to their bank accounts. which is great. businesses are a different story. i do think there's other industries, the insurance industry for example which is much like health care in that it's consolidated very large and distributed and the cyber security issue is something they have thought about but haven't taken it as seriously as

financial services. >> i guess this is a wake up call. next time you're in new york would you come into the studio and sit down with us for a bit? >> be happy too. >> this morning's big unemployment report expected to show the economy added 200,000 plus jobs last month but where are they? the head of dhr is here with answers next. but first check out the most clicked on stories at cnbc.com. ♪

♪ etta james "at last" sometimes, at last doesn't happen at first. ♪ your dad just kissed my mom. ♪ turning two worlds into one takes love. helping protect that world takes state farm.

perfected its perks. employees are given $100 of free lyft credit each month. and they have bagel wednesdays. we are counting down to the jobs report. ahead of that number we want to check on the pulse of hiring and corporate governance trend. with us is seth hoffman part of

the nation's fifth largest executive search firm. you look for people and place people in from what level? from sort of high middle management to ceos correct? >> yeah. we focus at boards of directors. the water mark from us from a compensation have comp of 300,000 and above. >> 300,000 and above. which sounds like a lot. in new york city obviously, maybe not as much or in a big city. maybe -- i don't know if you call these people necessarily fat cats or one percenters. but that's the perception in mainstream media at this point. >> it's all relevant. >> but anyone listening to their problems or trying to discern anything about the overall employment report would say this is sort of the ancillary to talk about regular jobs. that we talk about at 8:30. is that true? >> yeah you know the trends

have been different. at least what we're seeing at the senior level. you know for the senior level hiring we really haven't seen that correlate too closely with the bls number we'll be seeing later this afternoon. the high paying has been good since we recovered from the gulf oil financial crisis. and there are industries picking up more than others. but by and large it's been good for senior executives. >> can we glean anything about our lack of trained or skilled people at certain levels? either with technology or in some specialized fields. do you feel a shortage of the right people to be able to hire that other people are talking about? had. >> yeah, i think the skills gap we hear about isn't necessarily all that applicable at the senior level. i think the gap at the senior level is how they continue to go up. there are only so many good people at very specific sectors. so you need to have the right skill set, i think, to get the top jobs. and there's only so many of

those people. a lot of that training comes from on the job. >> why the limitations. tough go through the ranks essentially to get there. that's why it's down to such a small category of people? >> sure. it's a pyramid. and it keeps getting narrow at the top. there's only a field of so many to place in to run any organization. >> how about this? play devil's advocate. you're sitting in someone's chair that would ask you this better than i can. there's a perception that you're hiring talent like a sports star and therefore you have to pay out for talent. but then there's another perception that you get a crony board, people you pick yourself and that it's not a real free market. and that's why ceo pay is so exorbant. >> i don't know if that's true.

i don't think that boards sit in any ceo's back pocket anymore. there's scrutiny put on the boards and compensation committees making sure they're adhering to the market place. it's all -- it's a function of the free market. and to get the top talent tough pay the top dollars. >> you know compensation committees are advised by outside advisers. have you ever heard of an adviser walking in and saying i recommend that we pay our ceo or our executives in the bottom quartile of companies out there. does anybody ever say below 50%? that our executives can be paid in our lowest half? >> perhaps. >> i've never heard of a case like that. because if that's the case you don't want your ceos there anymore. if you think they belong in the bottom quartile you don't want them there. >> you wouldn't target the bottom quartile. >> when you read the quarterly "new york times" piece outing

basically almost branding the top ceos almost trying to embarrass them for how much money they make what does that make you think when you see that? do these guys deserve this pay? does it need to come down? is it some type of broken system we seem to be in right now? i bring up if yo ur a lefty and you got a really good curveball and you're young and can combine that with a fastball you're worth a lot more. peep say fine. but that's the free market. >> look at what they're making at the top and they have shareholder values. >> hundreds of thousands of employees at stake. >> can create billions of dollars in shareholder value. so yeah. i mean it could be tough. no doubt about it. i don't think we'll see it come down any time soon. >> thank you very joining us. >> thank you. when we come back we are continuing our countdown to the jobs report. two special guest hosts coming

up. we have barney frank and larry kudlow. plus a taste of business with a kick. the ceo of buffalo wild wings will join us. "squawk box" will be right back from the heart of midtown manhattan.

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job friday. today's number could show 12 straight months of employment gains. that would be the longest streak since 1994. plus from washington we are ready to rumble. on the left, barney frank. on the right, larry kudlow.

both are here and ready to debate. and buffalo wild wings ceo will tell us what's behind investors' appetite with her company. as the second hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc first in business worldwide. i am joe kernen along with becky quick. andrew is on assignment today. set your watches. we will look at the jobs report in an hour 28 minutes. forecasters are looking for 230,000 jobs from last month. that would be -- forget how many in a row that is over 200,000. but it's the best in a decade or so in terms of being over

200,000. the unemployment rate seen falling to 5.5%. wages are expect to rebound. they have been for awhile. we'll see. hopefully no disappointment here again with averagely hourly earnings to rise by .3%. making headlines at this hour, several u.s. states have joined the investigation into the massive hack attack against anthem. it looks like something that would be state sponsored spying and will continue to wait for more on that. eurozone ministers will meet next week hoping to work out a deal involving greek debt. they want to redo the country's bailout agreement. and raid joe, shack has filed for bankruptcy protection. the electronics retailer will sell its stores to hedge fund standard general with sprint operating two-thirds of those locations. a lot going on.

stocks to watch this morning. among those, twitter. earnings and revenue were better than expectations although user growth slowed significantly in the fourth quarter. but the company is talking about some specific things that happened. it might not be -- might not repeat. we could see growth pick up again. ceo dick costolo says it's picking up in the current quarter. gopro results also beat the street, but its profit forecast fell short. that's why the shares are dropping. the company also announced that the coo is resigning. yum share analysts are worried about slowing growth for the company yelp in the united states. and shares of linkedin sharply higher this morning. revenue at the company jumped. more businesses using this company's services to look at and consider job candidates.

>> among other stocks to watch this morning. pandora shares are down sharply. sales at the streaming service falling short. they were hit by weaker than expected advertising revenue. also blizzard warning that its current quarter earnings will miss expectations. the company is blaming the impact of a stronger a dollar. and earnings at buffalo wild wings missing the mark. we'll talk to the ceo coming up in the next half hour. joining us right now with perspective on jobs in america, the economy, and everything from wall street to washington former congressman barney frank. he is a cnbc contributor. also cnbc senior contributor larry kudlow. gentlemen, it is a pleasure to have you both here this morning. >> thank you, beck y i. >> we've got an hour to talk about this. we're expecting numbers to be pretty strong coming out on the jobs report. we're looking at unemployment to tick down to the lowest level we've seen in over six years. that has kicked off a big debate

about whether the fed is already behind the curve. there are some people who are saying that. we talked to jack welch this week and he said he thinks the fed would be crazy to raise rates at this point because of the strong dollar and what that means for companies here. i hope you two can weigh in on this. tell us has the fed done a good job to this point and what should they be doing? congressman? >> as i've seen it, those saying the fed is behind the curve don't think the fed should have thrown the pitch in the first place. that is, i think there are few people who are supportive of the direction they're taking that think it's now time to pull the plug. >> but you have heard people like larry fink who was supportive of the fed for doing it that now said it's been an awfully long time. >> it's been a long time but with no negatives. i don't see any of the indications. i mean obviously there'll be individuals. but if you thought they were right from e the beginning, all the reasons for starting are reasons for continuing. one of the things i think they've shown is and i think this is accepted that people

were afraid once they started they would never stop and it would snowball out of control. i think they've given an indication that they are on top of this. that this is not going to be on a dime but they can do it. i think you still have an economy that needs to be somewhat boosted. the fear of inflation is nowhere to be found rationally. i don't see why they wouldn't keep doing it. especially because they have time to stop when they have to. >> larry? >> well i agree with a lot of what barney frank is saying. i was never a fan of qe and still am not a fan of qe. however, that said when i look at what the market is signaling here inflation expectations 1.5%, 1.75%, if you could keep it there for the rest of our lifetime that would be good. commodity index has been falling. obviously oil is falling which i think is a great long-term plus. but in the short run, you've got to be careful. the dollar is rising. king dollar.

i think that's a great long-term plus. but i don't see any rush for the fed. >> long-term. i was going to ask you. but there can be times where you're like -- >> well, look. you know what? actually i'll change that. i think short-term it's a big plus. it could be but i don't think we're near that right now. look, i think the strong and stable currency attracts money, capital from around the world, holds down inflation, gives consumers and businesses a lot more buying and investing power, et cetera, et cetera. having said all that and quite sympathetic to chairman m frank's view my mantra is later rather than sooner. >> the strongest argument i've heard in favor of them raising rates sooner would be that they need a little something they can do. we're at 0%. usually when you're at this cycle with job creation you're starting to raise rates from a higher percentage. when you're at 0% interest rate

you have no powder left. if there is something that really goes wrong. >> you do. you have the same powder -- look. if you believe in the monitors argument which i think has not panned out during this thing, you would say they can buy more bonds and inject more cash into the economy. but, you know sometimes the fed and other government agencies ought to sit there and do nothing. all right? hyperactivism from the government can often be a bad thing. with the fed i would keep -- i'm giving janet yellen a certain amount of credit. she ended qe on time. >> had been signally. >> and that's good. but i just wouldn't rush into it. >> chairman frank? >> to the arguments nothing bad is happening now they're not in a position to do something if something bad does happen. so let's do a little bad now so they'll be able to get a little better. i mean that's basically -- if

you think things are not moving quick enough slowing them down so you can then speed them up again if they slow down again doesn't persuade me. >> i'll tell you, when i listened to you earlier, i think you end up being right. but i'll tell you what the people on the other side say, these are people who think the fed had something to do with the bubble of the financial crisis. they say it wasn't clear that the accommodative policies of 2004 and 2005 seemed great at the time. but that there was some blame in 2008 that happened. so maybe we're doing that here. and number two, they do seem to be able to get out now, mr. chairman. but with oil down and people wondering wow, are we falling off a cliff here? we had some say they might come back in. so it's like a roach motel we never get out of. >> i disagree with that. what they're saying is it will not be technically impossible but that the policy might not call for it. that's very different than saying it won't be technically possible. secondly this difference between

now and back then in the bush 2004/2005 with greenspan, i believe that some of the macrocredential stuff makes a difference. i do think there were people making loans in 2004 and 2005 with that excess -- with that liquidity that they couldn't make today. >> maybe there's things happening in emerging markets or around the world now where the risk curve has been put off. >> that's a different story than the u.s. >> see, it's different today. it's just different. >> there's a lot of lack of demand. >> i read a piece, i don't know three years ago now saying wait a minute there is no inflation. there is no inflation. at one point in 2012 election, the entire republican party was running against qe. whatever that meant to the public. dumb. 2003, 2004, 2005, the dollar was crashing. gold and commodities were soaring including housing prices. today it's the reverse. the dollar is soaring, gold and commodities are falling.

and housing prices are basically going nowhere. so it's a totally different story. what i would like? i would give left arm for this. here's a combination to get us back to 4% growth. lower substantially the corporate tax rate. go to territorial taxation meaning no double tax on the foreign profits. and couple that with a strong dollar and if the fed wants to raise rates later on this year the tax cut gives them a little shelter to do so. that's my idea. sound money, low tax rates. you'll get a 4% economy. >> maybe now we're getting into an area where you two don't see eye to eye on. >> that's certainly the case. at this point i think we should be increasing revenue. larry and i had a debate of spending more money at the national level on infrastructure. particularly transportation. you know, one of the problems we have with our accounting and it's inevitable we talk about

the deficit. but when we talk about the federal government or government in general, it's a peculiar form of accounting. because we count liabilities but not assets. i mean if i buy a house, then i have a house on the balance sheet to offset the debt. but if i'm the federal government and i buy a lot more roads and other important infrastructure, that doesn't show up anywhere. i'm not complaining about it but it does -- there are future needs that get unmet. so -- and i have one particular point right now. and that's something with the strong dollar. it's one asset to the strong dollar in an area where i disagree with policy. and that is it buys us a lot more where we're spending a great deal in afghanistan and iraq. i mean we are spending way more than we should. i was very troubled by the president asking for $51 billion in the coming fiscal year for afghanistan and iraq. i think this is an effort to do what can't be done. but given how much we spend

internationally in security that's an overall part of what the strong dollar was like. >> you think the president's wrong by asking for a 4.5% increase in defense? >> yes. for a couple reasons. >> now asking potentially for the ability to go after isis. >> one of my major things right now, i want to organize liberals for a japanese military. this notion that the japanese are still being punished for world war ii and what's the punishment? they're being thrown in the patch to grow. and we won't let them spend billions of dollars on their own military. so we do it instead. i'm ready to say that world war ii is long enough over for me to not want to subsidize japanese military expenditures now by punishing them. >> i agree only in so far as afghanistan. i actually don't know what we're doing in afghanistan. i haven't known what we're doing in afghanistan for many years. i don't get it. having said that, i think isis and al qaeda and the rest of that story is an existential

threat. i think it's totalitarianism versus freedom. and i think we need to commit more dollars to that campaign. we also need to have a real strategy. we must emerge victorious. >> then don't cut revenues. if you want to spend that kind of money, we could argue whether you do or don't. we never -- in previous history -- >> all that i'm saying is from other countries lots of studies have shown not all tax cuts are a braunch of that. but lower corporate tax rate produces more revenues. give about two to three years. >> we'll talk about it in a second. maybe we should you know maybe we should get the people that the money flows through that are the shareholders, get it through them and not corporations. >> now that i'm paying the top rate i don't see that. it does not deter me from doing

anything. the notion i'm going to keep 60 cents rather than 80 cents doesn't stop me from trying to make money. >> i could make more money doing other things. >> the cnbc contributor job has vaulted you into the highest rate. >> more like a hop skip and jump. >> coming up we're going to hear from ceo on the company's deal with google next. and then buffalo wild wings ceo. smell that? >> that is what we smelled coming in. >> a taste of her company's latest results. and chris van hollen checks in about the budget committee. and then at 8:00 eastern, our special news of the morning, philly fed president plosser. ahead.

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twitter's big earnings and revenue beat. the only thing was the, i guess, the user growth, julia. >> that's right. twitter reported doubling its revenue over the past year. but before costolo talked about that, he pointed to twitter's improvement. he also talked about adding 4 million new users. he said that trend has already turned around. the focus on the call is how twitter is working to make its core user base less. costolo announced a deal with google for access to tweets with search results saying it makes particular sense now because twitter is working o an range of ways to make money for people who aren't twitter users. like when they were redirected to a new more user friendly twitter home page. that google deal as well as the new home page were among the

many examples costolo gave to keep people engaged. >> all right, julia. thank you very much. when we come back this morning, it is quickly becoming a taylor swift world. find out how one couple is using help from the pop star to make a very major life announcement.

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♪ first it was viral wedding videos. now it's pregnancy announcements. a parody video of taylor swift's "blank space." they said the made the video to fill the blank space. some said the baby should be named taylor because of the video's success. >> i wish i knew the song better. i can't appreciate it. she's great. but this is from her new album? >> yeah. i think it is off that. >> okay. all right. i think about where i was in 1989. anyway. that's when she was born. today is national wear red day.

she has an album called "red," i knew that. the american heart association is trying to raise awareness of women's heart disease. here are stats. women are more likely than men to get heart disease and stroke but there is some good news. the american heart association says awareness and lifestyle changes can prevent 80% of the cardiac events. that's why we have red on. >> all of us have red on. this is a shade of red. >> i thought women outlive men. >> they do. the signs of heart attack are different often for women than men. so it's an educational process of knowing what to look for. >> i think that might be across cultures and everything else. >> my 90-year-old world war ii bomber navigator father died a couple weeks ago.

>> sorry to hear that. >> no no. it was expected. these things are hard i'm just saying my mother who is 89 is going to live another five or six years by all accounts. and she always knew that. she feared she'd be alone. i think there's a lot of that out there. women tend to outlive men. that's the way it works. >> it changes the perspective of what you need for retirement savings, to make sure you're maximizing social security along the way. >> if you can make it as a man, i mean it's the whole like you're a kid in a candy store. because there's a lot of single ladies around. >> really? >> if you can make it up there, you'd be the bell of the ball. >> i played tennis yesterday. felt pretty good. >> if you were a fan of gadgets and cool technology check this out. own phone wants to take on google and apple. it has a kit that lets people draw and design their own phones. a two dimensional cover or shell can be fitted around a blank cell phone unit. own phone is the brain child of

a user who says it can print simple. google is working on one to build their own smartphone as well. we have a lot more coming up. top stories including dropping rig counts which probably not huge. plus buffalo wild wings ceo sally smith joins with us atist of the company's growth strategy. "squawk box" will be right back. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda.

at ally bank no branches equals great rates. it's a fact. kind of like shopping hungry equals overshopping.

♪ welcome back to "squawk box" on cnbc. first in business worldwide. stories front and center this morning, oil rig counts continue to drop along with oil prices. weird. baker hughes says its worldwide rig count in january was just

over 3300. that's a drop of about 7.5% from december levels and nobody knows what the significant number would be to really cause a real solid bottom to be made and then a move back higher. and there's been quite a bit of discussion in a few weeks about what it would take. the bulls have been on a good run this week in both oil and stocks. the dow's up more than 4% over the last four days. the blue chip index on track for its best week since december 2011. and the big jobs report for january is less than an hour away. forecasters say the economy likely added 237,000 jobs last month. the unemployment rate is expected to fall to 5.5%. u.s. equity futures, moving into new high -- or at least moving positive for 2015. we've got the dow up a couple of points. s&p up a1.5. nasdaq less than 1.5.

but all this could change at 8:30. japan's government wants to cut down on work-aholics. a proposed law would make employers responsible for ensuring that workers take their vacation days. only half are ever taken. averaging just about nine days per worker per year. that includes sick days which count as vacation time. about 2 hurkss deaths a year come from work e who suffer heart attacks after working long hours. buffalo wild wings, we've got some here on the set. earnings were a little shy of analysts' expectations. but stock is trading pretty close to an all-time high. and the company is citing in part higher food costs and higher labor costs. ceo sally smith telling analysts that sales in 2015 are up more than 11%. the stock trading sharply higher in the premarket. sally is here to take us inside the numbers. good morning, sally.

total sales really impressive. and then even same-store sales. a lot of restaurant chains would kill for 5% or 6%. >> yeah. we were were pleased with our performance for 2015 and for the fourth quarter. strong sales as you mentioned. our same store sales in the upper range. impacted a bit by the cost of chicken wings quarter over quarter from 2014 to 2015. but with strong sales we feel very confident about what's going to happen in 2015. >> if i were to look at the commodity pages of "the wall street journal," would i look at broilers? what would i look at? in year over year what happened? chicken prices went up or something? >> yeah. fourth quarter 2015 was up 16% over prior year. that's not unusual. chicken wings, traditional chicken wings are really

fluctuating from year to year from quarter to quarter. and even month to month. it's something we've dealt with for a long time. you know, production was down a little bit. and of course the demand as you go into the football bowl games and super bowl certainly heightened as it's one of the favorite party foods that people serve at their games. >> definitely. you know, i've always given you a lot of suggestions. and, you know gmo chickens with three or four wings, i thought that. >> we're still working on that joe. yeah. we're still working on that. >> weren't there billions consumed for the super bowl. billions, i think, of chicken wings. >> i think it was something like 1.2 billion wings served super bowl weekend. i know we were up. we served over a 11 million wings on sunday alone. that was up from 9.1 million last year. so wings remain a very popular -- >> congressman frank. joe was hoping you could develop

another right wing for the chicken. >> oh! very good. >> and that still wouldn't offset the mainstream media, i don't think, even if we did do that. that's not any time soon. but think about it. for every two wings you need one chicken. i mean, that's -- >> you do. you do. and that's what causes the price fluctuation. the chickens are grown for the breast meat and there are still only two wings per chicken. >> four wouldn't hurt the chicken, i don't think. anyway, what about the higher labor costs? how do we enter that? >> a couple of things. we've been spending on labor in 2015 as we roll out our guest experience model. we're adding guest experience captains in all of our stores. it's completely rolled out. it's a company. they help the guests that come into buffalo wild wings find the game on the 40-plus tvs we have. help them sample foods.

and so we have invested in labor. that along with some of the minimum wage increases that we've seen has put pressure on the labor line. we expect that to moderate throughout 2015. as our guest experience captains become more experienced. and we're going to have -- and some technology things that we're rolling out. tablets, for instance, are in 70% of all of our stores. that should be complete before the end of the year. guests will be able to order on the tablet. and then we hope by the end of 2015 we'll be working on pay on the tablet as well. >> you're at a thousand stores? people are starting to talk about saturation. do you view that as saturation? does that mean you need to move away from your bread and butter? >> no. i think we still have a long runway on development of buffalo wild wings in north america. i think we targeted 1700 bstores.

we're at over 1,000 as we ended the year. we expect to add about 90 in 2015 and see that number continuing for several years. there are opportunities to continue to drive sales in our existing restaurants as well as you know, some smaller markets testing out some smaller footprint concepts in very small markets. and we think that gives us runway beyond the 1700. we also have international growth. we just opened our first store in manila philippines last week. very pleased about that. that opens up the gateway to asia. >> quick question. excluding the super bowl are consumers coming in the door -- i'm looking for a consumer boom in the next year. lower oil prices lower gasoline prices, incomes are rising. you know, job market's better. do you see any of that stuff? do you get more people actually

coming? >>. >> well, i think our traffic counts as you look at the fourth quarter and the first five weeks of january, very strong same store sales. 11.9% for the first five weeks in our company stores. some of that is definitely traffic. our price and we're going over about 4% price increase. so the rest is either mix or traffic. and i do think that gas prices give just that extra spending money for that family or that individual who has -- there's some pent up demand for going out. and we want to make sure they consider buffalo wild wings. but i do think -- and i think the industry's expecting pretty good sales in 2015. >> congressman? >> i'm very encouraged by that. i know you mentioned you have higher labor cost. it sounds as if you've been able to absorb those higher costs, maybe have a slight price increase, and in fact traffic is good. and profits are good. that's what i am hoping for. that an increase at the lower

level in that thing because one of the things is it's not a competitive thing. people aren't going to india for their wings, it does sound to me as if you were able to absorb those higher labor costs without any real ding to the business. >> we're still working on that. we did see some pressure as i mentioned because of the minimum wage increase or wage increase overall. but again that does give the consumer a bit more money. and we do think efficient scheduling and instruction of some technology will help us still be able to average as we move through 2015. >> all right. we've got to go. i cannot order a taco yet, can i, at buffalo wild wings? >> well, not yet. but one of our concepts that we took a majority interest in in august last year rustyç taco set to roll out across the united states. so we'll be bringing you tacos some day. >> okay. that was my question.

now i can get ultimate nachos. expand that a little bit. get more types of nachos. this is my idea. the four wing chicken. >> you are a one trick pony with mexican food. >> i know. all about it. they're moving into it. makes sense. all right. we got to run. we appreciate it. thank you. >> thanks so much. >> i mean he's more of a right wing. why didn't you pick on him? >> i believe in irony. i'm a contributor and he's a senior contributor. i don't want to -- i served in seniority systems too long. >> he's right though. he's right. right wing. it's okay. i'm okay with that. >> chernobyl farms. >> you know, free markets, growth. that's the whole story. when we come back this morning, budget committee ranking member chris van hollen thinks there is some common ground between republicans and democrats on the budget. we'll talk about that and also

the places where there's not so much common ground. get ready for a lively debate. "squawk box" will be right back.

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welcome back everybody. president obama's $4 trillion budget already hitting a sour note with the gop. the white house claims the minute ago saying there is some common ground. but why don't we start with the places where you think there is the most friction. >> well look. where the president is actually trying to provide tax cuts to people in the middle. he's got middle class tax cuts. he finances those cuts to people in the middle. by changing our tax code. our tax code right now is stacked in favor of people who make money off of money. right? they actually get lower tax rates than people who make money off of hard work.

so the president says let's reward hard working families. and he provides for a dual earner deduction. a couple with kids they're going to get significant help with their child care expenses. he's trying to allow the middle class check to go a little bit farther. while he makes investments for the future investments in things like education, rnd, and infrastructure. >> larry congressman frank. >> i disagree with you on this. but welcome to the show. it's a pleasure to see you again. look. >> good to see you. >> the president is raising taxes across the board on all forms of capital. capital gains, dividends, inheritance taxes. you suggested a financial markets tax. the president wants to tax banks. all i'll say to you is this. it might sound great on the surface, but it's capital that is essential to create a

business. if you want to create jobs and good middle class jobs you need new businesses. and capital leads to business and jobs and incoming consumer spending. if you tax the geese that lay the golden eggs and the future geese that lay the golden eggs i'm here to tell you it will backfire on the middle class people you aim to help. they'll be hurt. >> congressman? >> go ahead, chris. >> first of all, we'd love to have barney frank back in congress. there's no economic evidence for this. when ronald reagan was president we had capital gains rates at 28%. and according to republicans, the economy was just roaring back then. so the reality is that we have this tilt in the tax code that actually penalizes people who are making money off of hard work relative to those making money from what we call unearned income. i didn't invent the term.

that doesn't make a lot of sense. >> if you give me the same 28% top income tax that we had -- i was there in 1986. if you give me the same 28%, not 40% or 44%, then i would consider a leveling off and flattening of personal income. right now the personal income tax is 15 20 points higher than the capital gains tax. that's why it's not the same as the reagan years. >> the difference between 28 and 40 to me is 12%. not 15 to 20. >> the mid-40s when you look at state. >> that was 28 to 40. it's 12. state taxes in both cases. there were state taxes when it was 28. there were state taxes at 40. >> they're higher than they were there. >> in some states. but there's some ways capital is useful. i think we found during the financial crisis we had a system in which a lot of money b was being knead by the manipulation of money that was not terribly productive. i don't think much of what was

going on in the derivative area was very productive. it was about juggling in the economic sense adhering to the financial community. i think there's plenty of room for taxation in the financial area without impeding good capital formation that's going to go towards jobs. we also -- and i have -- we talk about the tax rate. i said this since i left congress. i'm in the 40% bracket. i have yet to decide that because something that's going to pay me well i want to get to keep 60% of it instead of 70% of it. then i'm not going to do it. i don't think when taxes were raised at the end of 2012 and we went back up to 40 on the top bracket, it had had zero negative impact economically. what hurt was when we suspended -- when we reinstituted the lower tax on the social security tax. but at the upper income level going back to 40%, that did not

in any way retard the great boom we've had since in those areas. it was the high end ones doing better. >> i don't want to keep arguing just on tax hike. chris, i want to ask you another question. spending has come down quite a bit. the budget control act of 2011 which included the sequester in 2013. now, i believe this has helped recovery. spending has gone from about 24.5% of gdp down to about 20% of gdp. which is close to its historic rate. that means the government is taking less out of the economy. that means the economy has a lot more private resources. i think that's one of the reasons the economy is doing better and jobs are doing better. because we are spending a whole lot less than we were. >> well actually the congressional budget office larry, has the opposite conclusion. in other words, they think if we had spent even less you would have seen a slower recovery. because even as the economy is improving and jobs are coming

back, that's good. there's still a little slack in the economy. and as long as there's a little slack in the economy, when the government spends less you actually increase the slack. so that's why the budget office has recommended a two-track strategy while where the economy is slow while there's not enough investment from the private sector into the economy, that's when government should be taking advantage of low interest rates. and making those investments while we also have a budget that reduces the long-term deficit. that that's the sweet spot. >> i want to go back to military spending. i think we could do even more to reduce what we are spending there. outside of the regular defense budget. you know, it's like we have the pentagon on retainer. and get the regular budget of $500 billion but when they go to

war then there's another budget. >> when you look at the world and the threats that are out there. >> i don't think america's military can stop these threats. threats in afghanistan and iraq are internal, they are religious problems. we have a great military. i don't think they can end corruption or bring religious reconciliation there. but you need to make sure the money will be well spent. the point i want to make about this and we have been -- that's been working well. the president deserves credit for a strategy there in coordination with people on the ground. works well. the point i want to make about the jobs is this. the unemployment rate would be much lower if we had not cut government so severely. private sector jobs the overall job total is up about 5 million from the bottom. 6 million of that 5 million is in the private sector. minus a half a million to a

million is in the public sector. and you know people talk about we cut government spending. i wish i could pass a law despite the first amendment that said don't cut government spending. thanks to me there are fewer firefighters. thanks to me we don't have as many people inspecting your food. we don't do as much to clean up environmental waste. got to spend more in areas that affect the quality of life that the private sector doesn't do. because it's not their job. >> i want to come back -- i don't want to debate the firefighters. but chris van hol nllenhollen dire results were predicted after the spending cuts in 2011 and the sequester in 2013. chris, as you know cbo predicted a 700,000 job loss because of the spending cuts in 2013. just those alone. a trillion dollars worth. what happened? 2013 was actually a decent economic year. 2.5% growth as i recall.

but the key point was not only did we lose 700,000 jobs we created over 2 million jobs. so that forecast that said lower government spending will damage the economy turned out to be completely untrue. and hence my point, i think those governments that spend less have private economies that produce more. >> where are those governments? >> larry, larry -- >> congressman? >> it's just the opposite. cbo would argue you would have done even better in job growth than you did. and just look at the european economies that have took the austerity approach. that's what republicans were recommending to us. look what happened there. >> i would think that -- i would keep the budget cap -- >> they wanted european austerity. that's what republicans were proposing. >> here's a reagan supplied -- >> we've got to go. >> -- lower they are corporate tax rate. >> we know that. >> i'm just glad we didn't listen to them. we'd be looking just like europe today. >> m ares love the 2.5% they got

from the sequester. they just hate the 2.5% they get from obama's policies. i love that. >> congress van hollen thank you for joining us today. >> thank you. >> you can use that, barney some time. coming up philadelphia fed 5-2 president charles plosser. stick around.ab a and you could earn tdd# 1-800-345-2550 300 commission-free online trades. tdd# 1-800-345-2550 so when a market move affects one of your positions, tdd# 1-800-345-2550 schwab can help you decide what to do. tdd# 1-800-345-2550 with tools like free live-streaming cnbc tv tdd# 1-800-345-2550 that give you the latest financial news and trends. tdd# 1-800-345-2550 and bubble charts and price charts that let you see exactly tdd# 1-800-345-2550 how market activity is affecting your positions. tdd# 1-800-345-2550 so when the time comes to decide whether to scale in tdd# 1-800-345-2550 or scale out you can make your move, tdd# 1-800-345-2550 wherever you are. tdd# 1-800-345-2550 and start working on your next big idea. tdd# 1-800-345-2550 ♪ ♪ open a schwab account and you could earn tdd# 1-800-345-2550 300 commission-free online trades. tdd# 1-800-345-2550 tdd# 1-800-345-2550 call 1-877-729-2379.

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all right. welcome back everybody. unfortunately the hour is just about over. we've got about 20 seconds to continue sparring.

i wish you guys were staying for longer but it has been a pleasure to have you both here tomorrow. barney frank and larry kudlow. >> profits are coming in good. strong dollars. i'm optimistic. >> barney you too right? >> i am but if we can keep going the way we're going and improve, if we keep doing the right things. and that includes i think the fed was doing the right thing. >> gentlemen, thank you. please come back. >> thank you. appreciate it. when we come back on "squawk box" this morning, it is charles plosser's final television interview before he steps down as philadelphia fed president. he will be joining us to talk economic growth, when the fed will raise rates, and he'll stick around for instant reaction to the jobs report as well. and les moonves weighs in on media consolidation net neutrality and his plans for super bowl 50. ...that sound good? not being on this phone call sounds good.

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at ally bank no branches equals great rates. it's a fact. kind of like shopping hungry equals overshopping. the moment you've been waiting for is almost here. we have half an hour away from the jobs report. and a special guest is here.

>> philadelphia fed president charles plosser joins us in an interview. >> plus a media power player on set. cbs ceo les moonves is here to talk new internet rules and why content is still king. the third hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick. andrew is on assignment today. it is jobs friday. the report is less than 30 minutes a i way with forecasters looking for 237,000 jobs. that's the number that will be above or below that when it comes out. this could be the 12th straight month of job gains above

200,000. which would be the longest such streak since 1994. we should go back what was the -- what won best picture in 1994? i can tell you who won best actor. no, that was 1984. u.s. equity futures down at this hour 18 or so. >> forrest gump i think? is that it? the that was the year that came out. >> we do go together like a box of chocolates. no. carrots and peas. >> other winners included ed wood, the lion king and speed. also out that year. >> no kidding. it was better than speed two. >> i think so too. among top stories this hour twitter shares getting a boost. earnings and revenues above. also an outlook on user growth. you could see carl's interview with dick costolo coming up on

"squawk on the street." a different story for gopro. the action camera maker warning that its profit forecast is falling short of the street's view and watch pandora today as well. the shares are down on weaker than expected sales. ad sales is the key issue there. >> thanks to that surge late yesterday and earlier. in the week we had that back-to-back big move. market guru -- really? you writing your own intros? >> no i'm not writing any of them. somebody is obviously giving me a lot more credit than i deserve. >> joins us now with more. holy cow. >> you know, becky, there are so many reasons why i love you. >> stay out of the teleprompter copy. >> i'm going to try not to. we're talking about a great day for the dow yesterday. it's moving that weekly at least

positive bias now back towards even year to date for the dow jones industrial average. you can see here we're up again a third of a percent. but still the bulls are claiming that's big given all the volatility we've seen. three stocks accounted for 75% of those points. those three really drove a lot of the point gains for the dow yesterday. there's a positive and negative story. this is the positive one. the negative one is that the leadership in this market here is not coming from the right place. and here's what i'm talking about. if you take a look at the s&p 500, the best performing sectors year to day, materials was a big one but that was all corporation, some of the other chemical companies gave it a bit of a boost. if you look at utilities, health care, and telecom. these are three more defensive oriented sectors. they're not expeasosed to the up and downs of the economy.

that's where the leadership is right now. they're not huge waitings. but then take a look at where the biggest laggards are. this is the telling sign. this is why the jobs number today is going to be a big, big deal. the industrial sector. the technology sector. the financial sector are the worst three performing sectors in the s&p. they make up a huge chunk in the s&p especially financials and technology. they are lagging behind right now. maybe indicating joe, that the economy is not as solid as some people think it is. back over to you. >> okay. dom, what it is? osensai. >> means teacher. >> you just saw me on camera. i had no access to the teleprompter, guys. somebody else put it in. that was not me.

maybe it was lisa. i have no idea what's happening. >> all deserved. >> that is nice. thanks, dom. happy friday. stock stud. it is jobs friday and in honor of that steve leisman is here and he joins us with a very special guest. steve, great to have you here. >> good to be here becky. charles plosser, philadelphia federal reserve president, thanks for joining us. >> great to be here as always. >> and i guess you'll be back but not at philadelphia fed president because you're leaving on march 1st. >> that's correct. >> we'll be sorry to see you go. in the meantime we have questions for you. the main question when does the word -- and i need to stipulate before i say this. you never wanted the word "patience" in this thing. you voted against it. but still i have to ask you when is your guest for when the word "patience" leaves the statement? when should it leave the statement? >> it never should have been in in the first place in my

perspective. but it's just another example of people thinking in terms of calendar dates or meetings or time. which it's really all about the economy. so the committee will have to figure out how it's going to transition away from patient into something else. and that's going to be the next order. >> why go from considerable time to "patience" and then also signal definitively which the chair did that patience means they're not going to raise rates? >> in fairness to the committee, we don't -- we try not to do anything extreme. we always are trying to signal to make baby steps, if you will. i think sometimes we get carried away with that effort. and it leads us into sort of contorted or language that perhaps we wish we hadn't started in the first place. >> right. our cnbc fed survey shows the market now is looking for the first like in september, they moved that up from june or july. is that you think, the best

thinking right now in terms of when the committee might act to raise rates? did it make sense to push it back because of what's been happening with inflation? >> well again, it depends on how you read the data obviously. so i don't want to talk about september or june. i think we need to have a statement that informs the markets best we can that we are going to react to the quality and the path of the data as it involves more active when the time comes. >> can i ask a question? can you tell us what the data is you're reacting to? >> at the two coasts or does it go over here. >> sure we look at data. the fed likes to look as it does looks at everything. ultimately you have to make a decision. and there are times when the data seemed to be indicating very strong growth. we've had four out of the last six quarters have been growth rates pretty healthy, well above trend growth.

yes, inflation is low, but we also know that it's being driven by the decline in energy prices. those are the things -- >> do yields in other countries, is that data you consider? if we have a higher 10-year yield from spain, is that something you consider when raising rates? >> not a whole lot. because ultimately the 10-year yield in the united states is driven by a number of things. it is going to be driven. look, a lot of the low yields in the united states are right now i think being driven by weakness mostly in europe and other places. and people are flying in a search for yield to come in to look for higher yielding. >> then that would be a yes, not a no. you do consider what's happening. >> i think you need to talk about where you are. you would raise rates now. you would have raised rates before already. >> well, i think -- i'm kind of

at the cusp. i think that there's a good justification for increasing rates earlier. maybe not a huge justification, but a case could be made. we're approaching a point where it's hard to justify not raising them. we are in a world where unemployment is 5.6%. we don't know what it will be later on this morning. but we've got well above trend growth for the last four out of six quarters. we've got inflation that yes is running low, but it's hard to -- for me in my mind on any economic theory of grounds to know of to justify zero interest rates in a world like that. >> what folks are going to say is not only is inflation low. and you have that -- those wages went down in december. >> certainly it's true but remember in i think 2011 and '12, cpi inflation got up to nearly 4%. whap did we do? we did nothing. did we react to that?

no. we said this is driven by a relative price change in oil prices. we need to look through that. so we need to do the same thing when oil prices are falling. >> although we had jack welch sitting in the seat next to you two days ago and he said the fed would be crazy to raise rates right now with the strong dollar. it will make the dollar stronger and it's going to give companies and exports a hard time. do you consider where the dollar is versus other currencies? >> i think the dollar is what the dollar is. we are a country that allows currencies to float. the u.s. is strong relative for the most part. i also argue that look the dollar has strengthened somewhat over the last year or so. this is not unprecedented.

we had a currency where it was much stronger relative to where it is. >> we are on the cusp of a currency -- do you think that true? >> i don't have an answer for that. it's hard for me to impugn or question the motive of other central barngs. >> don't have another mandates. you have a weak dollar mandate. but wouldn't that be covered under the spries stability mandate that you have? >> yes. >> okay. so you don't need another mandate. you've got too many already. >> we've got too many already. >> you agree? >> i do. >> i can tell you if we do 2.5% only this year then there are certain fed members that would say we failed by raising rates. because we're still at 2.5%. you've got both inflation and growth to worry about, then you're missing on -- >> that's more than enough to worry about. >> i don't know if that's the

case. >> one person looking for a job, i think janet yellen. >> very consistent about the dollar and i think charlie is right about it. i was on this set arguing that the fed needed to look through the 4% inflation rate if it was caused by volatile factors that were not -- i think the key is subject to policy. it's like when all the hogs get killed because of a disease and bacon prices go up i fail to see the connection between the disease that affected the hogs and monetary policy. i just want to ask one quick question. oil prices. positive or negative? >> positive. >> why? because the market has it totally differently. it drives me nuts. >> well i said long ago i never try to figure out the market. i don't want to do that. but i think from an economic perspective, this is like a very large positive supply shock for the economy.

for the world economy it's net good, yes. there will be countries that are big producers who will suffer from this. but the world -- importers of oil are the united states china, japan, india, europe. they rely heavily on energy and all of them are net importers of that. it will make them on net better. >> the market's looking at a lot less negatively than a week ago. >> will you see the correlation numbers? used to be a .30 correlation. now it's .7. every time it goes down the market goes down. i don't get it. >> i think the short-term look at what happens with a major chunk of earnings. >> yeah. >> and there's a war in the ukraine and you see oil going down 50%. you think we're missing something on the horizon. so worried about growth. that you say maybe that removes more concern. >> and that's a good question we can ask. >> more supply than demand

maybe. this is great to have you here. >> it's great to be here. >> how do you like our set? >> it's great. it's beautiful. >> it would be better if more easy money bought more sets. >> the problem is qe-3 -- no. charles plosser going to stick around through the jobs report. then up next a high flying edition of where the jobs are. mary thompson takes a look at jobs and the fast growing drone industry. it's all leading up to the jobs report at 8:30. we'll be right back. there's a difference when you trade with fidelity. one you won't find anywhere else. one-second trade execution.

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and speaking of just droning and droning, mary thompson joins us now with more from daytona beach. hello, mary. good morning. >> hey there, joe. good morning to you, joe. i'm here in the robotics lab where they actually offer a bachelors degree in unmanned aerial systems which are better than known as drones. students are working on this which will be entered into a competition this spring. expected to do a lot of hiring very soon. here's why. the faa faces a september deadline to oppose rules for the commercial use of drones for news gathering, agricultural movie making. pick estimates over 103,000 jobs could be created by 2025 paying the minimum of $45,000 a year. right now it's defense and

security companies offering the jobs. and the pay here is pretty good. >> the salaries are usually tied to the difficulty and the qualification level of the individual. but anywhere from $50,000 stateside. if they're willing to take an overseas engagement can be as high as $125,000. >> california based environment is hiring adding 100 people to its 650-person workforce this fiscal year. it makes small battery powered drones ranging from 3 to 13.5 pounds. drones used mostly for information gathering. gets him a lot of freedom given he doesn't have to think about the human element. >> can fly for weeks, months years at a time. that's something i'm excited to explore and develop. >> now if you want to go into drones, you're going to need those skills. science, technology and math.

for more on it read my story on cnbc.com. back to you. >> where you must really drone. wow. i mean on cnbc.com. hey, mary. have you thought about, like ten years from now in populated areaing is it really going to look like the future? is that really coming? >> well this is what the faa is exploring right now. it basically has a number of test sites that are happening around the country looking at ways the drones can be used. there's a lot of concern. tough kind of integrate them into the international air space in a very safe manner. what they're doing is working with different companies giving them these certificates of authorization and studying how the drones are employed at what level they can fly, looking at different populations as well. they're not just going to introduce them willy-nilly. this is going to be a stage process. the primary reason for this is to keep the skies of the u.s. safe. >> you just wonder. we got to go mary.

thank you. but yesterday we talked about so many people worried about artificial intelligence. and then if you combine drones with artificial intelligence you're right at terminator level. you're at hunter killer flying around. >> killer drones. >> looking for, you know using some type of living things and just destroying. >> i've got a lot that keeps me up at night but killer drones i'm not there yet. more worried about fed policy and the economy and the jobs number coming up at 8:30. but killer drones i'm not going to worry about that yet. >> they look for anything with heat emanating. >> and then they fire. >> yeah. >> pot meet kettle. when we come back it is final prediction time. we will ask charlie plosser to get in on the break as well. after the jobs report, cbs ceo les moonves will join us right here on the "squawk box" set. stick around.

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we're just a few minutes away from the jobs report. and that means it's time for final predictions. dow jones consensus estimate is an increase of 230,000 non-farm jobs. let's start with philadelphia

fed president plosser. you really want to guess? you did a blank look. >> you know, i would not do it. i can make myself look silly enough all on my own without going to great lengths to do it. >> becky? >> i don't have any reason to guess this. i know this is a volatile month because of the seasonal readjustments so i'll make up a number. 198. >> i can't draw a drone, but this is a drone trying to kill those scurrying away. >> are you looking for negative employment then? >> lower unemployment rate for sure. >> here's my number. it's 209. aye got this model that's been working for awhile. born by the government shutdowns. that's why i started the model. we had no way of knowing what the number would be. anyway, it's 189 for the private

sector. and i've been plus or minus 20,000 the last two months. last month i was off with 100,000. >> all right. well, the moment that you've been waiting inging for is almost here. we're just a few minutes away from the january jobs report. when we come back we will bring you the numbers, market response, and reaction from charles plosser. the futures look a little bit weaker. dow futures down by 21 points. hey matt, what's up? i'm just looking over the company bills. is that what we pay for internet? yup. dsl is about 90 bucks a month. that's funny, for that price with comcast business, i think you get like 50 megabits. wow, that's fast. personally, i prefer a slow internet. there is something about the sweet meditative glow of a loading website. don't listen to the naysayer.

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welcome back, everybody. we are less than a minute away from the january jobs report. we've been watching the u.s. equity futures. they've been on hold this morning awaiting this number. this is important for the market that will tell us about growth and the employment picture in the united states. you can see right now the dow futures down about 20 points below fair value. the s&p futures off by 7. the nasdaq down by 2 points. this is an important number but

also volatile. january you have the biggest seasonal adjustments as steve was pointing out. up to the holidays. but as soon as the holidays hit and january comes, all those temporary jobs are gone in one fell swoop. it doesn't change importance to the market. hampton pearson is standing by. and take it away. >> up 257,000. january non-farm payroll increased by 257,000 jobs. the unemployment rate is 5.7%. january average hourly earnings up 0.5%. that's the biggest monthly increase since november of 2008. average hourly earnings over the last 12 months up 2.2%. private sector job growth up in january by 267,000. there were significant revisions for november and december. a net gain in the two months of 147,000 more jobs than

previously reported. the biggest bump november went from a reported 353,000 up to 423,000 jobs. job gains in january, retail trade plus 46,000. construction plus 39,000. health care gained 38,000. how did we get to the 5.7% unemployment rate? the number of unemployed increased by 267,000. the civilian labor force actually increased by more than 700,000. the labor force participation rate, 62.9%. that's an actual increase. we did have the benchmark revision march 2014 is the benchmark month up 91,000. statistically not important overall. the biggest factor where the benchmark revision showed up was in november and december which i

already talked about. year over year job growth revised. just over 3.1 million jobs. the best year since 1999. the household survey revision no impact when you take into account the population control in that 5.7% unemployment rate. back to you guys. >> hampton thank you. we have a lot of surprise on this set. let's get to rick santelli own jim iuorio for their reaction to it. what do you think? >> well, obviously on the surface it's a good number. i always like to see the unemployment rate kick up. it shows that there's some reality to the notion that maybe the jobs growth is actually spreading and will pull back many who have given up. but i'm more interested in the market place. i can't tell by looking what the breakdown is. good jobs bad jobs high paying, low skill. you know these are going to have to be left for combing later. but we did see a big jump basically up to the 190 area.

close to the 250 area in 30s. and guy, this is exactly what the charts have been telling us. we haven't seen these kind of big moves down in rates because it was all kind of sucked up in the process leading up to it. should we close above 186 in tens? i think you could get close to where we were last year which is well over 2%. >> we've seen similar moves in the equity futures this morning too. looks like we added 30 points for the dow. >> interesting now because there's two debate questions i wanted some clarity on going into this. the one being is good news good news. and the initial reaction is it seems like it is. that's what i kind of suspected as well. i think the fed's been very good at convincing the market that if things start to fall apart, they're there, not to worry about small rate increases coming up because they'll do it cautiously. but the second debate question was if we really lost 21 thourkss thourkss,000 jobs in january, how that was

going to play out in the number. no we've seen what i thought to begin with. on balance although there's a negative argument for $50 oil, on balance it's more of a positive than negative. i actually went into this number a little bit long stock futures. and i'm glad i did right now. hopefully i got to get back to my desk soon. >> jim, rick, thank you both. we'll talk to you soon. >> thank you. >> steve, you're going to talk back to plosser. wanted to raise rates. anybody else wanted to raise rates? are they listening to you at all? how's it feel to be so right? go ahead. sorry. >> no, i was just going to say and i think you're right but the idea that the three-month average of job growth in this country has just now been transformed from 288,000 to 336,000. i don't have my historical charts in front of me but my guess it's been a very long time we've had a three-month average of 336,000. charlie, and i'm not going to ask you about today's number, i'm going to ask you about the three months that now have been

revised up as hampton said by a combined 140,000. this number comes in better than expected. is your view of tightness in the labor market changed now? >> i think these are very good numbers. as you and i have talked before, the pattern seems to be everything gets revised up. so the first tends to be on average too low. i think this is extraordinary in many ways. and another signal that the economy is actually functioning in a fairly normal fashion. and i think that's an important message to get across. and that we stop thinking about our economy as something in some kind of perpetual crisis. >> we had a 0.2% decline of wages in december and a 0.3% it looks like. i'm not sure which number. earnings all private workers or -- anyway. 0.3% rise in the one and 0.5% in the other one. what does that tell you about the direction of wages and the concern about wage inflation?

>> i think one month's numbers never convince me of anything. but it does seem to be the signals that way of gradually rising. they're going to continue to gradually rise. they're unlikely to jump up quickly. but they are on the rise. that's a good sign for american workers in general. >> and what people need to know is one of the reasons the unemployment rate grows is because 700,000 people came back into the workforce. the workforce rose. and there's not always jobs for all of these people who declare themselves on a month's basis available to work. what does that tell you about the amount of slack that's out there that we incorporate the 700,000 and the unemployment rate goes up. >> one of the thinkings we do know is we have seen consumer confidence numbers high. when the consumer is confident about the economy, some of those people are going to get drawn back into the labor force. i think that's perfectly natural

and predictable. but i don't think on the other hand we're going to get back to those levels of labor force participation rates we saw before. >> what's the boom taking all this in and all this demographic stuff in? >> i think most models of demographics of age and force and so forth are signaling the participation rate is going to continue to drip down. it's not going to spike back up again. yes, there are going to be some wiggles along the way. it may be flat for awhile. >> we're going lower than 63? >> it's going to depend on demographics. it could be. >> in the sense that if we were doing -- we have that many jobs added in november and december. and now in january. we have wages not too bad relatively stable. i'm not seeing the -- and by the way, we have confidence as you said up. gas prices down. i'm not seeing the consumer spending that's going along with these -- this rise in jobs and increasing paychecks in the

economy. >> i thought that when the gdp numbers came out that 4.3% in the fourth quarter, that's pretty good. >> i meant the consumption numbers we got to. >> i think the month to month stuff is oftentimes hard to rationalize. i'm going to go back to the fourth quarter which i think is a healthy consumer spending number. >> so one other thing i want to ask you about is when it comes to what's happening in europe a lot of people say we have this -- joe was talking about it earlier, becky as well. low inflation over there. low interest rates. talk to me about how sensitive the united states economy is to what's happening overseas. is it the determining factor? sit one factor? how do you put it into context? >> so the u.s. economy is still a very big mostly domestic economy. it has been for a long time. trade channels are bigger than they used to be but still we're mostly a domestic economy.

so yes what happened in europe and around the world is one number. but it's not usually the determinant number. and so while it is interesting to think and imagine how this might help europe and others how it might play out for the u.s. economy. but i don't think that the magnitude of those effects are enough to sort of derail the kind of growth and the kind of performance that we've been seeing. >> it's kind of funny. we could import a whole lot of what's been happening in europe through traders and inputting the fear from over there. but in terms of the ships and their hard goods, there's not a lot. it's like, we're one of the least sensitive developed economies in the whole world compared to -- britain is 27% to 30% of their gdp. we're 13% or 14%. >> multinationals nushls are horrible right now. and it's real. >> that ends up affecting growth. >> well no it can. but again, it depends on where they choose to invest where they choose to hire. and it depends on so many other

things other than just the trade number how it affects their income flow. >> do you have a gdp number for this year or next? >> i think it's about 3% for this year. >> both years? >> for '15 and '16. that's what i'm looking at. i think these numbers make that a pretty reasonable guess. >> you're going to be leaving the fed. would you just tell us your wish for how policy shapes out over the next year or two? if you had your way in how monetary policy actually played out, what would it look like? or the year-end funds rate be? the end of next year? >> i think we need to be thinking about moving off the zero balance. as i said a few minutes ago, this is not a crisis economy anymore. we're a long way from 2009 and 2008. we need to operate and conduct policy as if we're not in crisis. so i think it's important that we begin to move off the zero balance.

i think actually our ability to raise rates gradually would be greater if we started sooner than wait and wait and wait until we reach the point where we have to chase rates up really rapidly. that actually might be more disruptive than trying to start sooner so that we can move more slowly. >> you know that guy? >> no. >> you stuck your tongue out at him? >> don't out me with that. there was a guy taking a picture. >> just going from one big unity to another. so we have to -- >> thanks for outing me. >> i watched what you were doing. here it is again. >> there we go. charlie, we can't thank you enough for joining us. and don't be a stranger after you leave. >> big money in cnbc contributor jobs too. >> 60 bucks an appearance i think? >> minimum. i don't think it's dollars. it's euros. >> plus expenses?

>> i know you have a big interview coming up. >> i think we can talk about it. jack lew. >> all right. that's a big one. that is monday on "squawk box" starting at 6:00 a.m. coming up a giant in the media industry from consolidation to net neutrality. the importance of content. we'll talk it all with cbs ceo les moonves. he will join us on the set. very day. you'll get things like rewards bonuses on credit cards... extra interest on a savings account... preferred pricing on merrill edge online trades and more... across your banking and investing get used to getting more. that's the power of more rewarding connections. that's preferred rewards from bank of america.

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the media industry buzzing with consolidation talk. cbs is front and center. both a potential buyer and target earlier this month. mel karmazin told us that he thought cbs should buy time warner. we'll talk about this whether that could actually happen. i thought jeff was pretty smart when he said mel's still got a bunch of cbs stock. you know what i mean? cbs ceo les moonves joins us now. before we get to all the weighty stuff, i was ribbing you a little bit about the super bowl. and you said you're happy -- i think it's a mixed thing for you. you're happy because you sell off nbc's numbers but at the same time you know you can't possibly match the execution of the nbc team and everything else with the actual showing of the game next year. >> i'm going to bite my tongue.

no nbc did a spectacular job. >> what a game. >> they had a phenomenal matchup. two great teams. you couldn't imagine a better game. i thought katy perry was sensational. >> i did too. >> i think top to bottom they were lucky and good. but the good news for us it's the one day of the year truly where we root for them. because we have super bowl 50. and our ad rates which are going to begin north of $5 million for a 30-second television spot are based on their great ratings. so i congratulate the nbc guys and i'm very happy for cbs as we head into it. >> people were stunned that nbc got $4.5 million. it too many until the final week you sold all of them. you're convinced this is the starting point and going up from here. >> no question about it. super bowl 50 starts about a minute after super bowl xlix is done. i saw our sales guys and nbc did

great, but we're going to do better next year. hopefully we get a great matchup and great game like they did. >> all the distractions, too, with the nfl. and all along i was saying i want to get behind this so i can focus on watching the game. and half-time was great. if you came back would you rather come back as les moonves in another life or lenny kravitz? i think i'd be lenny. >> being as my wife's guy crush is on lenny kravitz, i don't know i want to go that way. so when he comes on i turn off the television set. >> you're not the only one, i don't think. all right. so we want to start with the karmazin thing, the post thing? >> you know what? there's a lot of noise out there. you know mel stated time warner and cbs would be a great group. >> it has been discussed in the

past. >> it has. look. there are certain things we are probably closer to time warner in many ways than any other media company. we own the cw together. we do the ncaa basketball tournament together. warner brothers is probably the top supplier of shows. both companies are doing extremely well on their own. time warner has been up a lot over the last few years. we've been up 300% over the last five years. which i'm very proud of. so both companies are in great shape as stand alone. there's always a lot of noise. i know there's especially more noise now because there is consolidation of distribution companies that are potentially with comcast. but having said that both are doing well stand alone. i think parsons said the right thing. let's just wait. let's just wait and see how the

world progresses. right now we're happy being alone. >> you said that cbs is close tore time warner than any other kmeed ya company. does that include viacom in the mix? >> obviously we were together. we split apart in '06. viacom's assets very different than ours. though own a lot of terrific cable networks and paramount studios. so in terms of interaction, there isn't a lot of crossover with viacom. again, a lot of noise. should viacom and cbs come back together again? they say it will give you more clout in the market place. we feel like we have plenty of clout in the marketplace. we had a battle with time warner cable recently in which we came out just fine. we recently had another negotiation with dish. we came out just fine. we have the nfl. we have the number one comedy in "big bang theory." the number one drama in "ncis." we have a lot of clout where we

go in with contributors to say, you know what? you really need to have cbs on the air. we don't need to add to that. >> you were just talking about content again. and it's never -- i guess it's never going to get old. you could never -- the slow-growing cbs did beat out the other one, didn't it in stock performance. but you don't want anyone to mention that. is that okay if i mention that? you're not going to stop me -- >> by the way, viacom has done very well as well. we've done great. >> the word is sumner's 91 and you're looking at whether you're going to be able to -- you know, you have a new contract that goes out into the future. you don't want it to happen where suddenly viacom and cbs get put back together so you might buy the -- put together a buyout or -- >> there is so much noise out there. >> is this absolutely false? you haven't looked into this at all? >> you know what, joe, there's a lot of noise every day. there's, you know, a few newspapers out there that love this story.

they like creating controversy. you know that. the news business isn't always about telling the truth or all the facts that are out there. so, you know there's a lot of noise. viacom is a great company. we're a great company. at the end of the day, remember sumner has always said over and over again about succession, it'll come to the board of directors of each of those companies to decide how the companies are run. i'm here till 2019. i have a new deal. i'll be a little bit older than i am now. but i'm looking forward to that and i'm feeling very good about -- >> some people think as far as taxes and a lot of different reasons it would be a good idea even for the redstone family to do it in a way where you would buy up -- >> joe, i have no idea what the estate, what's involved with the estate or taxes or any of those things. as i said our board of directors and me and my management team care about one thing -- shareholder value. we're in great shape financially. we're buying back a lot of

stock. our stock price is doing extremely well. that really is all we're focusing on day to day, not all the noise that certain publications may want us to focus on. >> i'm going to be talking with ken a little later this morning. he back in 1991 said look i thought it was the end of the day for the big broadcast companies, content and the idea that content is king because of all these new players that are out there interested in content has changed that perspective. where do you call this at this point? are we looking at another 20 years of this? looking at another ten years, five years? how far down the road? >> i've been in the network business for a long time. i have heard about the at the time of networks for as long as i can remember. there's been a definite shift with the back en, meaning the ownership of the content is becoming as important as the advertising. it is about the content. i don't think television has ever had a better day. and by that i'm talking about the networks and the premium cable networks as well. there is a quality of television

on that's never been there before. this year our company has created five new hits that we own. three on cbs, which is ncis new orleans, madam secretary and scorpion one on showtime, the affair, and jane the virgin on the cw, which won the golden globe for the young actress. so that content is what's going to continue to propel us and continue to make us really thrive. in addition the other thing and the other reason ken was off and subsequently i think he's more positive toward us, is the fact we're putting a lot of our content online and getting paid for it. so i love the headline that said cbs, which is considered the oldest, most traditional broadcast network, is also leading the way with their content online. >> you know, >> you know, it basically says you're the best executive in terms of creating content.

i remember reading stories. william peterson didn't even have a job and you, like put him on rae re taner and eventually found csi -- so you know how to do that. you know how to do new media. are you the right guy to be here? i'm so scared of what the future looks like don't you need to hire some young people that know what the hell they're doing? >> joe, first of all, i'm much younger and hipper than you are. >> you are. >> no question about that. >> so you watch this the show. >> yes. we have a bunch of guys in san francisco at cbs interactive who are spectacular. >> you don't try to pretend it's all you figuring this stuff out. >> of course not. i have a bunch of really smart 30-somethings who are up there coming down to see me and our team and coming up with the ideas, how do we do cbs all access, which is our online programming service. cbsn our 24-hour cable bypass news service. >> should you be doing these things? >> absolutely we should be. we view them from a very stable

business point of view, but we're also forward thinking. that's why ken's book was wrong. we are not stagnant. we're take kwhag we're doing and moving it forward and getting paid for it. that's why we're having great results. >> for some reason we feel like we're on the cusp of a big consolidation because you are desperate still in desperate networks. but you don't see a new age of all these different players switching partners? >> number one i wouldn't characterize this as desperate. >> that was the name of the book. >> i know that. >> like the "desperate housewives." >> it was bill carter's book. >> i'm sorry. yeah. ken was three blind mice. >> ken was much earlier. you know look the distributors are consolidating. everybody's looking at are the content companies consolidating. i don't see a whole lot of movement going on in that area. could it happen one day? i'm sure it could. but right now -- >> you're not thinking about that all the time.

not thinking about it hardly. we are in new media. we're self-evolved. obviously, there are certain assets out there that might be attractive, but right now i love the cbs corporation and the assets we have. >> are any of the assetious think are attractive would you ever get into it? >> i doubt it. that doesn't appear to be what we are. we established ourselves as a content-produce mag sheen content-produceing machine, have 35 shows in production so that's where it's at. >> announcing the 8:30 hour we had the best sportscaster al michaels but he says "squawk box" and welcome to new york. >> al michaels is a very dear friend of mine a great broadcaster who did a great job on the super bowl. >> you'll be back. we're close now. you're across the street. >> as many times as you want. >> thanks for coming in. >> thank you. >> and fielding all these questions. >> when we come back we'll get market reaction to the jobs report. plus we are just a few minutes

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box." the economy added jobs but unemployment rose. you did see big revisions for november and december. they revised the numbers sharply higher, the stock market up about 35 points, a move of about 60 points from where we were before. ten-year yield moving up. >> make sure you join us on monday although next week is at&t pebble beach week. we'll do the show from there on friday. "squawk on the street" is next. ♪ fly like an eagle to the sea ♪ >> good friday morning. i'm carl quintanilla with sara eisen, cramer is off today. 257,000. that is the jobs number for january, above expectations, some nice upward revisions to prior months and the premarket pretty strong as a result on the best week for the dow in about four years.